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Thursday, December 11, 2014

Why not buy silver???

This Is What Americans Will Spend Their Whopping $380 In “Low Gas Price Savings” On

Zero Hedge

For all the talk about the boost to the US economy (if only in consumer spending terms, certainly not as a result of crushing CapEx and energy sector investment), the bottom line is actually not all that exciting: as the WSJ reports, “If prices were stay at their current levels under $3 a gallon, the average American household could save $380 over the coming year, up from $83 since prices first declined this past summer, according to research firm ClearView Energy Partners. Regular gasoline fell to $2.64 a gallon in the U.S. on Wednesday, according to auto club AAA, near a five-year low. Gas prices have fallen more than $1 a gallon from their high in June and are down 60 cents from a year ago, the greatest year-over-year savings since 2009. AAA estimates that gasoline prices could fall to $2.50 a gallon by Christmas.”

The spin was immediate:

The drop in gas prices has already raised retailers’ hopes for a stronger shopping season, since less spending at the pump gives consumers more to spend on everything from restaurant meals to clothing and haircuts.

Great… just ignore the terrible Thanksgiving weekend spending numbers, traditionally the strongest for spending 4-day period of the year, which this year just happened to be the worst since Lehman. And yes, plunging gas prices were already clearly demonstrated at gas stations in the weeks and months heading into the end of November.

The spin continues:

“It’s a fair bet that most of the reduced energy costs are going to show up as added spending by consumers somewhere,” said James Hamilton, an economics professor at the University of California, San Diego.

Here’s the thing, Professor Hamilton is spot on. The only problem is what this added spending will be used on. Sadly, it is neither trinkets, nor gadgets, nor BigMacs, nor even surging cell phone and home internet bills. Unfortunately for the proponents of the “oil crash is unquestionably bullish for America” (as an aside, the falacy of a statement is directly proportional to how “unquestionable” it is), where the bulk of “savings” for those Americans who have to spend on gas (primarily those Americans who commute to work, i.e. the middle class) is… on Obamacare.

Here is confirmation that in a centrally-planned economy, it is the unintended consequences that always prevail in the end:

As of January 1, 2015, Blue Cross Blue Shield customers will experience a 14.5 percent increase in premiums, while Wellmark Health plans will see a 11.9 percent increase.

Example 2:

Hundreds of thousands of consumers nationwide who bought insurance plans under the Affordable Care Act will face a choice this fall: swallow higher premiums to stay in their plan, or save money by switching. That is the picture emerging from proposed 2015 insurance rates in the 10 states that have completed their filings, which stretch from Rhode Island to Washington state.

In all but one of them, the largest health insurer in the state is proposing to increase premiums between 8.5% and 22.8% for next year, according to a Wall Street Journal review of the filings. That percentage represents the average rate increases for all individual health plans offered by that carrier

Example 3:

Aetna has said it is likely to seek rate increases of more than 10% for individual marketplace plans in 2015, according to a note from Citigroup analyst Carl McDonald. An Aetna spokeswoman said that with health-law fees, generally increasing health-care cost trends and other factors, “that level of increase would not be out of the realm of possibility,” but it was too soon to say what it would request.”

Example 4:

Americans increasingly have to dig into their own pockets to pay for medical care, a shift that is helping to curb the growth in health spending by employers and the government.

The trend is being accelerated by the Affordable Care Act because many private plans sold by the law’s health exchanges come with hefty out-of-pocket costs, which prompt some people to delay or put off seeking care. For the exchanges’ 2015 policies, which went on sale last month, “bronze-level” plans have an average deductible of $5,181 for individuals, up from $5,081 in 2014, according to a November report from HealthPocket, which publishes health insurance market analyses. Bronze plans generally cover 60% of consumers’ medical expenses.

And that ignores the fact that the average deductible for workers who get employer health coverage has shot up 47% to $1,217 from $826, and that one in three Americans said they or a family member delayed medical care because of costs in 2014.

Example 5:

The average individual deductible for what is called a bronze plan on the exchange—the lowest-priced coverage—is $5,081 a year, according to a new report on insurance offerings in 34 of the 36 states that rely on the federally run online marketplace.

That is 42% higher than the average deductible of $3,589 for an individually purchased plan in 2013 before much of the federal law took effect, according to HealthPocket Inc., a company that compares health-insurance plans for consumers. A deductible is the annual amount people must spend on health care before their insurer starts making payments.

Example 6:

“Average subsidized premiums are expected to fluctuate between 2014 and 2016, as a result of a growing risk pool and increased participation of the young and healthy. After 2017, average subsidized premiums are expected to increase by 6 to 10 percent annually

Example 7:

In 2014, premiums in the non-group market grew by 24.4% compared to what they would have been without Obamacare. Of equal importance, this careful state-by-state assessment showed that premiums rose in all but 6 states (including Washington DC). It’s worth unpacking this study a bit to understand the ramification of these findings.

Non-Group Premiums Rose in 45 States Due to Obamacare … All of the percentage changes shown in the chart below represent the net change attributable to Obamacare after accounting for all the other factors that would have made premiums go up...

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